A central Illinois lawmaker wants to make changes to the state's pre-paid college tuition program because he says it's dangerously close to financial disaster.
Bloomington Republican State Senator Jason Barickman says the problem is College Illinois' unfunded liabilities at the end of last fiscal year were nearly $450 million. He says it's because the state is locking in funds to families with no guarantee they’ll be there when children eventually enroll in college.
"Anytime you have a program that is dependent on attracting new investors to meet obligations that have already been promised to current investors, it gives you pause."
Barickman says actuaries tell him College Illinois funds will run out of money by 2027 unless at least 1,000 new contracts are sold annually.
Barickman is sponsoring legislation he says requires colleges to certify future tuition and fee costs so investment funds have solid cost figures for its contracts, and would require future sales be limited to annuity plans to create predictability and stabilize costs. He says current contract holders would be able to transfer funds to one of the other state-sponsored 529 plans, cash out their contract, transfer to an annuity plan, or do nothing.